Just saw this proposal today.  My reaction: NO, NO, NO, NO, NO.

Even if everything you say about your idea is true, that doesn't change the fact that it would be, as you seem to accept, changing the rules.  It would be breaking the promise made to every single user that there would be no money creation beyond that specified by the protocol.  Not acceptable.  So, at most, you've justified starting a *different* bitcoin-like currency, and I wish you the best of luck in getting such an inflationary currency off the ground, though that will be kinda difficult.

But please, only impose this inflation on people who have accepted it; don't change horses midstream on a currency that only has its current popularity because of a promise that it would pull stunts like yours.

Setting all that aside: as others have mentioned, such a system can be gamed through fake transactions, and your time-money system does not prevent this, it just delays it, and encourages the earliest-possible overloading of the block-chain with pointless transactions.

In your defense, this is not an error on your part, but an error of all the economists who advocate NGDP targeting, and its shortcomings here are a direct implication of the unappreciated shortcomigns of NGDP targeting in regular money.

If you want to stabilize the value of Bitcoin, there's only one way: widespread agreement regarding exactly how useful Bitcoin will be.  And to do that, you need to remove uncertainty.  The protocol itself does a lot already to accomplish this: by having a predictable money supply (appropriately defined).  Introducing a new source of uncertainty -- how many more will be produced by your new scheme -- only increases volatility.